Mr. Conway highlighted that managing crises requires a flexible, situation-specific mix of monetary and fiscal measures, with an emphasis on maintaining independent monetary policy to uphold inflation expectations and central bank credibility.

The Governor of the Reserve Bank of New Zealand, Mr. Conway, emphasized that the COVID-19 pandemic demonstrated the crucial need for coordinated monetary and fiscal policies to stabilize the economy, and highlighted that learning from this experience is essential for preparing for future shocks.

He concluded that applying lessons from the pandemic will help New Zealand better manage future economic crises, stressing the importance of the complementary roles played by monetary and fiscal authorities.

During crises, Large-Scale Asset Purchases (LSAPs) proved effective, not only stabilizing financial markets and preventing inflation from undershooting targets but also increasing government tax revenues, which offset their costs.

Mr. Conway explained that in times of crisis, monetary and fiscal policies often work together to support financial markets, employment, and inflation, even if their objectives differ during normal periods.

Research released alongside his speech assessed the costs and benefits of LSAPs, confirming their role in stabilizing markets and stimulating the economy during the pandemic.

He stressed that LSAPs should remain a key tool for crisis intervention when the Official Cash Rate is at its lower limit.

Mr. Conway concluded by stressing that the pandemic served as a vital learning experience on how these policies can interact effectively during extreme turbulence, and that these lessons should inform future crisis responses.

While advocating for cooperation between authorities, he clarified that monetary policy must remain independent during crises to preserve credibility.

He pointed out that LSAPs helped stabilize volatile financial markets, prevented inflation from undershooting targets, and increased government revenue, largely offsetting their direct costs.